Most Americans today have at least one credit card, and many, more than likely, have a number of them. As of December 2015, the average debt per credit card was $15,762, and American consumers owe almost $733 billion total in credit card debt. The two primary credit card companies are Visa Inc. (V) and MasterCard Inc. (MA).

While both companies offer credit cards with similar features and usability, there are some differences, though most users won’t notice them as many merchants accept both cards. The companies are publicly traded, with Visa and MasterCard commanding a $171.7 billion and $97.5 billion market capitalization, respectively.

How Credit Cards Work

Credit card companies like Visa and MasterCard don't actually issue individual credit cards directly; rather, banks, credit unions, and even retailers issue branded cards. The issuing financial institution usually sets the credit card’s terms and conditions, including interest rates, fees, rewards and other features. When a credit card holder pays his or her bill, the financial institution receives the payment – not the credit card company.

Visa, MasterCard and other credit card companies, such as American Express Co. (AXP) and Discover Financial Services (DFS), make money by charging merchants and businesses a fee for accepting their card as a method of payment. These firms don't consider themselves financial companies. Instead, Visa refers to itself as a payments technology company and MasterCard prefers to be called a technology company in the global payments industry.

Today, not only do businesses accept credit cards, but services such as PayPal Holdings Inc. (PYPL) and Square let everyday people accept payment via Visa or MasterCard.

Where Visa and MasterCard Differ

While differences in interest rates, credit limits, rewards programs, and perks are controlled by the issuing financial institutions, Visa and MasterCard compete for those financial institutions. The credit card companies will offer certain perks such as identity theft and fraud protection, travel and car rental insurance, or purchase protection as incentives. Business credit card customers may also be entitled to certain discounts at hotels, airlines and gas stations. Merchants may also be able to negotiate different fees with the credit card companies depending on volume.

Since the only underlying difference between credit cards is the perks, choosing the right card network comes down to what the customer values most. For example, Visa tends to have a better “Loss of Use” coverage on car rental insurance than MasterCard; however, Visa's benefits exclude car rental insurance in certain countries entirely. MasterCard offers “Return Protection” with very few cards, whereas Visa's Signature cards widely carry that service. For gold or other elite cardholders, the credit card companies may also offer concierge services to handle certain tasks and save time for the consumer. These services vary and may provide access to event tickets, restaurant reservations, hotel recommendations, or even assist with gift purchases given the recipient’s age, preferences, and the buyer’s spending limit.

Many credit cards that participate in bank-offered rewards programs can be changed from Visa to MasterCard or vice versa upon request and reissued. It’s also worth noting that among the most common credit card networks, American Express usually offers the greatest perks. However, these cards usually carry an annual fee and are less widely accepted than Visa and MasterCard. Discover often has the lowest degree of perks, having no purchase or return protection, no rental insurance and no concierge services.

The Bottom Line

Visa and MasterCard are two of the most popular credit card brands in the world, though these companies don't issue credit cards themselves. Banks and other financial institutions issue the cards, setting interest rates and credit limits and sponsoring rewards programs. Since Visa and MasterCard are usually accepted wherever credit cards are taken, the consumer should focus more on the interest rate and features of the card rather than the brand. The actual differences between the credit card companies are subtle but may impact a consumer when it comes to perks such as fraud protection, travel or car rental insurance and purchase protection.